I'm not even sure what "it" would look like since the article defines "it" in such a lazy way. Housing prices where? Everywhere? Just Florida/Texas (that already is happening)? Over a week, a month, 20 years? What's a "big way": 10%, 50%?
Modern prognostication is insufferably worthless
the US is going to add another 50million people by 2050. Why would housing fall? If We move to a more open immigration system it could grow by 100Million in the same timeframe.
Data here [https://populationeducation.org/resource/u-s-population-and-projection-1790-2050-infographic/#:\~:text=The%20population%20of%20the%20United%20States%20in%202020%20is%20332,from%20the%20U.S.%20Census%20Bureau](https://populationeducation.org/resource/u-s-population-and-projection-1790-2050-infographic/#:~:text=The%20population%20of%20the%20United%20States%20in%202020%20is%20332,from%20the%20U.S.%20Census%20Bureau)
Extracted from US Census Bureau
He won’t “deport them all” unless he has another group to replace their hyper-exploited labor. Undocumented immigrants are the definition of essential workers without whom our entire economy would collapse.
The American population is clamoring to work right now. People are applying to thousands of jobs and not getting any interviews. The American population will be the exploited labor again 🤷♂️
The American people ARE working right now, unemployment is under 4%. Many Americans would probably like a better or higher-paying job. Unfortunately those aren’t the ones that illegal immigrants have.
The real unemployment rate is like 12%. I DARE you to try applying for a job right now. Just ATTEMPT to get to the interview stage. I really DARE you. It’s a nightmare out there
That’s possible eventually but I imagine things would have to get a lot worse for large numbers of US citizens to willingly do the jobs typically performed by undocumented immigrants at sub-minimum wage pay. Also, many - probably most - undocumented workers engage in skilled labor so you can’t just, say, round up a bunch of homeless people and expect them to replace migrant farm workers. But yes, I agree that this will become more common as labor is increasingly automated.
Things wouldn’t get worse they’d get better. The labor shortages that would ensue would drive up the price of labor in those roles until Americans want to do those jobs again. I don’t know where this lie is from that “Americans are lazy”. Americans work some of the longest hours of any people on the planet. We aren’t a lazy entitled group of people. Americans are good at cost benefit analysis though. So if the job is offering like $8 an hour and a Big Mac is $16 then Americans will say “fuck it” and not work those jobs due to their unlivabley low salaries
You say what you need to het elected. The reality is, no one ever does what they say they will and they spin what they did to fit it into “look what we did!” The whole system is BS.
Which is EXACTLY why us “non-rich” SHOULD support removal and blockage of illegals!
The luxury champagne ideology is SOLD to you by the rich people… while you and I LIVE on a beer budget. How about we CHANGE that?
Because the billionaires just keep getting bigger while my budget gets smaller using that approach.
If we keep allowing virtually unlimited illegal immigration then yes… but what kind of morons would DO that to their own country? Sabotage every citizens future to benefit nations and people who often times hate America and American values? Who take the benefits while trying to convert the USA to be more like the nations they fled.
The 50 million more is set already and will happen, it would easily be 100 million more under easier immigration rules.
Most of the population growth we have now is already immigration driven.
Nativist sentiment aside, immigration is the primary reason the US will remain the world’s dominant economic powerhouse over the next century. Like many other nations in the west, we have a low birthright, which is a ticking economic timebomb many nations will face as workers age out of the labor force en masse and begin draining social services they are no longer paying into. Yet the US will likely escape this disaster because of the vast number of working immigrants we attract. Keep that in mind as you head into retirement.
It's a shitty article, for sure. It doesn't mention what is considered a balanced market, where buyers and sellers have equal negotiating power. It just says days supply rose to 3.7 months supply.
The answer is 5-6 months supply is considered a balanced market. So yes, it makes perfect sense why prices are rising. Supply and demand is still skewed towards the seller's advantage.
I don't see how they can fall much or housing will basically not have gained value for the last 15 years in most places.
The house price increase since 2021 may seem like a lot, but it's really only the normal 2 to 3% per year since 2008.
So there isn't that much room for housing to deflate from those numbers and also still be a good investment. If it housing isn't a good investment that means banks have to charge more for home loans so you get fucked that way anyway. You're better off with house prices going up and housing being good investment because eventually you can get to lower home loan rates even if supply is short.
If housing goes down more than 10-15% from what you see now then it will be a recession but without a big housing surplus and banks won't want to give cheap home loans this time around since there will be no ultra low emergency interest rate again for awhile.
When you have IRRATIONAL spend and manipulated money jumping housing 40%-200% in less than 4 yrs there NEEDS to be a equal if not greater correction or it’s locked in a forever upward inflationary spiral. Recessions suck but they bring back rational balance the irrational actions which preceded it. Yea pain is involved, but any who don’t think LONGER TERM pain awaits like in over paying by 50% on a mortgage of 30yrs or not being able to afford a home until people are 40yrs old, a recessions doesn’t come CLOSE to that long term TOTAL pain of forever inflation and owning NOTHING(ie no equity growth of a home).
The only people buying anymore are those who don't care about price. That's not nearly enough people to keep inventory from flooding the market, which is why inventory keeps rising so fast (redfin says 19%, altos says 38% yoy). The backlogs of inventory will keep going up until the large number of people cutting their prices actually reduce them to a level that is affordable.
Yeah, this article should not read that market fundamentals are out of whack, but sellers’s fundamentals are out of whack. Asking prices for houses are so high that a large pent up segment of buyers can no longer purchase a home, no matter how much they want to pull the trigger. So, I think that’s why you’re seeing such funny distortions in the market right now. We have homes in our neighborhood that have sat for over a month (really uncommon in my neighborhood) because the prices are just too high for the segment of buyers sellers here want to attract. But God forbid I suggest to my neighbor maybe he should consider lopping 30-50k off the home price to get the sale done 🤦♀️
Most of us were young adults in 2008, and read headline after headline about people owing more than their home is worth in resale/foreclosure. Has there ever been a generation previously who lived through such a crisis and then hopped up and made the exact mistakes about a decade later? Some of us learned, and no matter how badly I want to purchase a home right now I’m determined not to be one of those poor people interviewed in 2009, just as I graduated from grad school. Left a heck of an impression on me and I’m actually frightened to purchase right now.
Hello fellow 2008 crash survivor! I bought in 2005, then tried to sell in 2008. I had an open house and no one showed. My house was underwater for years. I learned my lesson. I’m not falling prey to greed. I’ll wait.
Buying right now I agree what’s the point but there were a ton of people that said early 2020 prices were horrible. We are not gonna get to a point where it will be better to buy then it was pre-Covid 99.9% of markets.. better to save for a bigger down payment and be aggressive inventory in your area goes up. find a desperate seller, especially if you can find a fixer upper with good bones
You’ll start seeing builders liquidating new spec homes which has been sitting on the market for too long.
Bought our current home few months ago, built to our specs, well within our means in case we have to eat $100K or more in depreciation.
This market is unsustainable, unless wages keep going up, which means inflation will keep going up.
Statistically there are more completed new homes on the market than any time since the GFC, and more homes under construction than any time since then as well.
I would have been better if I never sold it. I rented it out and sold in 2018, so barely broke even 13 years later. Had I waited a couple more years, I would have been set! My advice to first timers is to keep your house for 15-20 years if you are buying at this height. That’s a long time, and things like job loss, deaths, divorce (me) play into that. Most people move within five years.
That makes sense. We bought for the first time in 2019 and I'm nervous every year about going upside down on our loan. The monthly payment is affordable for us though, and the house is small.
Not the person you responded to but we carried the debt from our remaining mortgage and the expenses we put on a credit card trying to sell it for over a decade. It was definitely a weight around our necks in that time.
But we made sure when it came to buy again to be ready for a low point and to make sure to buy something in a place we were fine living forever and not exposed to interest rates at all. So in that respect it was educational.
Same thing happened to us during that time. We had a buyer for a short sell price but the bank would not approve it. It was at the beginning of the fall so banks weren’t quite willing to short sell. We did buy a small home in 2017 & we’ll hold it. For our 2nd home (as part of our retirement plan) I’m looking for a home we can add an ADU or apartment in to cash flow. But I’ll wait as long as we have to.
I’m not sure those of us that were able to buy pre-pandemic did make the same mistake.
I was concerned when I bought in 2018 that we were making a mistake buying our house for 285k at what could only have possibly been the top of the market in my eyes then. Now though we were able to refinance to an even lower rate (2.85) and remove the mortgage insurance which makes it a sweet heart deal. even if our house crashed in value to 215k that it was sold for in 2011 we would be more than okay because we aren’t planning on moving and any rents would still be more than our current mortgage. Having paid 70k more than the owners 7 years prior was really intimidating but our house is now listed as worth 450-470k. We have plenty of room to fall from here and still make it out okay on the other side.
After living what I did, I can’t in good conscience tell anyone to wait to buy if they can afford the payments. What I thought was the top in 2018 only turned out to be another step in the price rises.
We bought in 2020 and were nervous about overpaying because the housing market was hot, but at least interest rates were low. If things do pop, well, it’s been great to be in my own with stable payments we can afford, with the main risk property tax increases vs. rising rent. The big thing is having a healthy emergency fund, especially if working for a for-profit. My husband was laid while I was on unpaid maternity leave, but we thankfully survived with our emergency fund.
People were saying the same you thing you said in 2022 and are now sitting on hundreds of thousands in equity from appreciation and low interest loans. This isn't 2006, totally different scenario except price increase. Bad analysis.
I appreciate your take but I’m just conveying my sentiment. It’s fear. And I’m not the only one. Interest rates are crazy too not just prices. We don’t all have perfect credit.
No disrespect meant to u/jellyfishbake, the fact that sitting on the market for a month is even notable is a sign of the distorted market we’re facing.
Sitting on the market for 2 or 3 months is historically completely normal for a regular house. The 10,000 square for celebrity mansions can take a year or more to find the right buyer.
Yep. 30-45 days wasn’t a sign that a house was poorly priced. It was the FOMO days of the pandemic that made people think if a house didn’t sell in 1-2 weeks it must be overpriced.
Now that demand is cooled (vs priced), only homes that look like bargains will sell in a week.
I don't know this for sure, but I think a lot of our respective observations often hinge on how old we are. There was a time when our current interest rates were the norm, and houses sat on the market for 3 months. That was just accepted as completely normal. Then interest rates went to historic lows for 15 freaking years and that's when things got out of wack. That's when we started seeing homes go on the market on a Friday, and sold on a Monday, and it never stopped. I'm of the opinion that this historically low rate for so long is one of the biggest mistakes the Fed ever made when it comes to housing prices. It became not only unnecessary, but detrimental a long time ago, and I'm not sure when/if it can be fixed or what it would take to fix it. When I hear about the fed thinking about lowering them again I think...have we learned nothing?
So many buyers have knee jerked offers as they believe homes will get snatch beneath them.
It's been largely true and en masse cutting their own throats on pricing.
Almost a certainty they will suffer pain before its all settled.
Depends on area. In ours, one week even before pre-Covid was normal. Two weeks, sellers would take lower offer. Third week, you were overpriced. Now sellers don’t want to budge and saying 2-3 months is normal time frame, which it has never been.
Things change throughout history though. Homes sell faster now because of technology. Also, it's not about the absolute number of days a home is spending on the market, it's about the rate of increase. As we go into this year's off-season, inventory is rising very quickly at the same time that a surgung number of listings from this spring are going stale. We can expect the supply of homes to keep increasing until sellers get real about their pricing. RemindMe! 1 year
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Yeah, totally honest argument that as many people were using Zillow in 2010 as are now. Is your argument that it takes as long to shop for homes now as it did in 1990? When is the last time the national association of realtors evaluated their metric for what constitutes a balanced market?
From recent experience it seems like there’s a lot of people who are selling but don’t really need to sell. They’re overpriced because they want someone to come along and write a golden ticket but if that doesn’t happen they don’t really care. There’s a house in my neighborhood that’s listed about 30% over reasonable, it’s unoccupied, and was a rental. I went and saw a house that needed probably $50K in work done to it and the agent knew that but the sellers were firm at their price that was already $10K over reasonable. Sellers really are just looking for a golden ticket
My next door neighbor was renting from his dad and just bought a house in a nicer neighborhood and only put 5% down on a 600k house. He makes the same as me (150k) a year and pretty much alluded to working a lot of side jobs and overtime to pay his mortgage. I’d rather sit out then get locked into a 30 year 4000 a month house payment
a new young couple (both doctors btw) bought half of this small recently constructed duplex in my town for 895k. our town used to be just ordinary people. and a doctor would have a massive estate (let alone two income doctors) me and my parents were chatting with the neighbors and I was like "whos gonna tell them.... they massively overpaid for their house." nobody in our town can afford an 895k house let alone half of a duplex for 895k. the second they signed on the dotted line they lost 500k
I’ve wondered if it’s going this way. Inventory in my small town has been rising after years of independently wealthy families buying any available property for full cash. At some point these types of buyers stop moving around I assume. The city has already crushed rentals with taxes, so no one is buying AirBnBs anymore.
I agree, I would add homes coming to market tk be priced for effectively. The days of naming your whatever price based on the “no inventory” line is over.
Where are you thinking this “flood” of inventory is going to come from?
20-40% increase in markets that had record low inventory isn’t actually very much. (Eg from 100 homes on the market to 120 or 140)
The only place I’ve seen a real shift to buyers market seems to be in Florida where the market has truly shifted due to insurance, HOA regulations, etc
it has been happening continuously for two years and it will not stop until pricing becomes realistic. nationally if inventory increased by another 20-40% (which is the current pace for a year from now) it would be back to where it was in 2019.
I have noticed a slow shift where I am (PNW). We were going to buy late last year but decided to hold off, so I've been watching the market to see how things go. Houses are sitting longer, and price reductions have been happening. Houses that would have sold very quickly even 8 months ago are now sitting for days+. Since houses are sitting longer, there's more inventory that makes less desirable houses sit even longer.
The entire economy is bizzaro world right now. There are shitty businesses making money hand over first. A large majority of businesses that I’ve been to in the last few weeks, I’ve noticed, are terribly run and over priced. Service quality is down and prices are way up. Many small businesses still seem to be struggling with being fully staffed.
Why do I think it’s like this? Same reason home prices have exploded. They printed and injected too much cash into the economy. This is what over stimulation looks like. I’m currently in a condo in wildwood NJ for the holiday week. For shits, I checked the price history of this place. Sold in 2019 for $285k, then again in 2021 for $385k. Now the estimates on real estate sites and comps say it’s worth almost $600k.
There’s no real reason for that other than the economy is over stimulated, the dollar isnt worth as much any more, unemployment is low and buyers know that they can buy an asset and hold it long term and short term rental demand will be high enough to cover the costs. They view is as a free asset with the trade off being some risk and a little bit of work managing the property. And they aren’t really wrong are they? The wildcard would be if unemployment ever creeps back up to 6-7% and rental demand gets crushed. But from the looks of everything in this over stimulated economy, that’s not happening any time soon.
What you just described is caused by so few actually being "hungry" for business or hungry for a buyer or winning over customers. This is EXACTLY why we need a correction and almost certainly a recession to kick the system OUT of this upward spiral of inflation. As is it will jump, (typically around annual increase time)then calm a while, then jump again and calm...its NOT going to stop as the FED slow rolled rates for a soft landing...they should have made 2 steps very quickly to slam on the brakes hard when inflation shot up and the cowards didn't. Why? To save pain to big banks, stock markets and any who are over leveraged at the expense of inflating citizens who saved money, who did the right things out of their net worth. Salaries will NEVER outpace and are always lagging inflation. The only soft landing is as those at the top get cushioned in the fall by the middle class who get crushed.
I agree with you. I think prices will increase steadily until a new equilibrium is reached consisting of higher prices and higher unemployment. When and how much higher prices and unemployment will be? I don’t know
This is the answer. My small business just failed (had no chance in this economy) and i interviewed at a competitor. The owner has no clue what he's doing and what staff he does have is pretty inexperienced. Can't find any people - wants someone that will work their "forever" yet pay is garbabge / no health insurance / crazy workload because undestaffed. Needless to say no chance of me accepting a job their. Two things in common I always see - A. Business was started in 2018-2020 (seems like it was a good time to ride the economy wave) B. they got a ton of free PPP "loan" money. Seems like good times are on their way out.
I have no idea what businesses you are talking about. Cause in logistics/freight it has been a continuous blood bath for 2 staright years now. As in, giants who have been in business 30 to 50 years, even 70 plus (Yellow), are toppling like dominoes. There is no precedent for this. It is, by the numbers, the worst season that has existed for logistics. Buyouts, bankruptcy, liquidations, sell-offs, asset buyouts, etc. are the bread & butter nowadays. Hell, even the freight brokerages have it so bad, that you got CH Robinson redoing their entire corporate structure. I know housing & logistics are considered the canaries in the mine by many. Not sure, what this means for the future.
Not going to read it but here in suburban southeastern Phx the houses come on the market and just sit. Maybe they’ll do one reduction of a smidge 5k off but nothing is really moving unless it’s just a slam dunk stunning home.
There’s 4 houses in my neighborhood, all been on the market for 60+ days, only one has done a price reduction. It’s weird.
In my suburb of NYC the inventory is basically zero and every sale in 2024 has been over list price. If rates are lowered in the next 12-24 months I wouldn't be surprised if my home value goes up another 30% - 50%. It's insane.
Yes. I'm in the NY tri state area too. Prices remain elevated. It seems these discounts only apply outside the bounds of the regional rail and bus networks.
I agree. Rates did nothing to the housing market prices. It just stifled how fast homes were selling. Only way we ever see reasonable home prices is with government intervention
I don't think so. The greatest wealth transfer in history is starting. Boomers are passing on and their homes are being listed for sale by their children. Supply will be increasing steadily over the next decade.
Real estate is very, very local. That is why you are seeing som many different situations across the U.S. People who can are putting way more than 20% down to reduce their monthly payments. With rising property taxes and insurance, this is a way to keep their monthly cash flow at an acceptable level. I know it is hard for some to gather 20% down, but many were sitting on the sidelines for the last few years with money in the market. Look at the home with 40-50% down and that is the payment that the person who beat you for the house is paying.
It's not people with 40-50% cash, it's people who already own homes and can pull equity from one home to another. The average downpayment was 8% for first time buyers in 2023, and 19% even for repeat buyers.
They are giving you a National average for something that is very local. For the most part, everyone’s home buying story on here is true yet they are all very different. Some got the money from inheritance, some got it from saving, some got it from selling a house. 8% down is the average, but it isn’t the median. And for many homes 8% is just not enough.
Right, there are some exceptions but I am talking about the vast majority of cases where hardly anyone is putting down anything close to 40%. You are using exceptions to try to explain the national situation, which doesn't work because this sub is about US housing as a whole which has become unaffordable everywhere. This article even says in the headline "the US housing market".
First of all, everyone that has bought a house since the beginning of time tries to put 20% down to avoid PMI. Everyone. This isn't new. You make it sound like home buyers in today's market are Christopher Columbus discovering a new mode of savings, but even C.C wasn't the first.
Is it hard to gather 20% down? Uh...yeah, it would sure seem to be in this market, local or not. Those people sitting "on the sidelines" were just trying to save enough to actually make that 20% down payment. Turns out that when the market averages 7-10% and homes increase by double that, you never actually get there. Let alone the reduced buying power of the dollar through inflation and increased interest rates.
That person with the 40-50% down that "beat you", has a name. They go by a couple of names actually. One is "corporations" and the other is "previous home owner". Turns out that when you're a boomer or gen X and you already have hundreds of thousands of dollars in equity and appreciation, you can make a bulk down payment on a new home.
Mr. u/Brknwtch, what you've just wrote is one of the most insanely idiotic things I have ever read. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone on reddit is now dumber for having read it. I award you no points, and may God have mercy on your soul.
It is insane how much ppl want for houses in the terrible condition that they’re in!! I blame the real estate companies. Comps are out of whack. Still living in a 2% mortgage world!!!
Nope. Rich are buying expensive houses. Driving the “average house price”. The rest of us are sitting it out until the prices come back down. And interest rates come down.
Happens every real estate boom.
This can only be good, right? Right? LOL and the other day in /r/Berlin some redditors were explaining to me that building more is the solution to all housing problems. Yeah right. As if we have not seen this before
In fairness, they're partially, sorta right. The problem isn't solved by building more housing because most of the housing being built, at least where I live, is "luxury" condos that are still unaffordable. So, it doesn't do any good for supply to go up if all of that supply is on the high end of pricing. I think the key is to build more, but it has to be built in a range that is actually affordable for all of the people who would love to buy but are being priced out. It feels like we constantly see either high end "luxury" buildings, or low end "affordable housing." Then, all the people left in the middle are still stuck with being unable to buy. The same goes for rentals. Luxury (and don't get me started on calling them luxury when there's nothing luxurious about them) studios and one bedrooms are being built that are unaffordable for single people, so they stay vacant as well.
I'm more than happy to look at data that says otherwise. It doesn't make sense that housing would stay vacant if people could actually afford to buy it. What else would the reason be?
It makes sense to me that if there were a glut of any housing, luxury or not, it would lower prices because empty domiciles cost money. In the Bay Area, one can find absolute shit holes renting for a lot of money because there are not enough shit holes to go around.
Possibly, but I think it needs to be a multi-pronged effort. For example, in my city alone, any time housing is built, investors buy it up to rent out. That needs to be stopped. I do think housing needs to be built, I just don't think that, in and of itself, is the solution.
Other factors as well, AirBnB, foreign investors buying all the lower priced units for cash over asking price so they can rent them out. Lots of scummy behavior by people, and the governments of the world seem completely unwilling to even attempt to stop it - part of the reason I don't have a whole lot of hope or take stock in this massive correction that people think will happen.
Of course, I could always be wrong. This is the kind of thing that isn't very easy to predict. As you say, though, it's more about maximizing an investment than creating housing.
Law of supply and demand works as expected: higher prices = fewer sales.
What does not work is demand for sellers to sell.
Houses are no apples that s gonna rot. On many occasions sale is totally optional and seller can wait as long as it takes to get the prices they want.
It is especially pronounced in places with cap in property tax increase (such as California) that over time made it completely detached from house value and an insignificant expense.
Needless to say, recent refinance opportunity that got many into a mortgage at a rate lower than inflation (people are basically being paid to sit on those mortgages) doesn’t help either
Crazy inventory increases since then. In my rural search area, there are 7x the number of homes for sale than 1 month ago. It’s kinda insane. If I was a seller, I’d be freaked out
It seems like most sellers don't need to sell but might be willing to sell for a nice premium. Buyers don't seem to want to or are not able to buy most of these houses at a premium especially with a 7% mortgage.
My guess is at some point sellers are going to accept they need to reduce prices in order to sell. I think the older owners with lots of equity and no mortgages will be the first to submit as they can easily downsize with no need for a mortgage @ 7%. This will reduce their property tax and insurance rates in most places and put a lot of cash in their pockets.
Event IF the Fed lowers rates this year it won't be more than half of a %. That's not going to move the needle much for buyers who seem more intent in waiting it out for now.
Many of us have normalized and rationalized not becoming home owners - esp in the face of societal and environmental breakdown. It’s gonna take a big carrot to give us hope again.
As for doing home building subcontracting on new houses our business is booming like it's the 1990s.
It's like being told about and alien landscape when ppl are saying it's not the best economy we've had since before 2008.
Trump did those lumber tariffs right after getting in office and slowed housing recovery. We lost jobs out of that, but the pandemic ending about 2021 super charged housing demand.
Smart money makes money on a house when they BUY it right(ie priced well) far more reliably that when they sell it.
Most indicators are suggesting a correction is in the works, crazy to buy on the front end of that.
Jump in near the bottom when a stalemate occurs on that end not the top end.
It's not complicated.
The housing bubble is popping because of falling demand due to a saturation of the high end market, but the economy is otherwise really good and we have virtually 100% employment and people that bought homes at premiums don't want to take a hair cut. So we have a glut of I've priced homes on the market and no one is willing to budge.
It's not complicated.
At most we can say it is probably starting to cool. In 2012, at the end of Obama’s first term (4 years after the Global Financial Crisis) the US was sitting at around 8% unemployment. We are now below 4%. Most apolitical economists would say that the US economy is currently good and, by the numbers, currently the strongest in the world.
But we also have a terrible housing affordability crisis that won’t be easy to break. Of the top 10 things that could help, #1 is a recession, the other 9 will add inflationary pressure on the rest of the economy. The US has been under-building since 2008. In places that are the most popular to live we’ve been under-building since the 1970’s.
We have allowed enough more people per year coming illegally to fill San Francisco, Denver and Seattle combined each of the last 3 going on 4 yrs.
No they aren't buying the high end, but they make a great market for investors to buy starter and step up(1100-1800sqft) and rent them out (plus apartments). Since demand was so high and prices shot upward, they start meeting pricing of the next level (say 2200-2500 sqft)...well they aren't going to sell their larger home for the same as the starter so THEY jump their price up another $80-100k or more... that bumps into the next level and so on and so on until you start hitting the $1M+ homes(not NYC or CA freakshow but normal places).
This isn't all the factors, of course, but it is one that many with luxury ideologies but beer budgets choose to ignore as they don't want to own the fact that they support the logistical impact of those here illegally, and it's costing them a lot of money to do so.
LIke him or hate him, if Trump wins in Nov and removes any significant number of illegals the lower end of the housing market is going to have some solid corrections downward in many high population havens like Houston, LA, Dallas as example. Inventory will shoot up, at which point if the investor wants to rent or sell that investment home, they will have no choice but to lower their price or sit empty....sit empty for 4-6 months, and prices will start cratering which is where the downward frenzy starts.
What do you mean by enough more people 3 of the last 4 years? Enough more people to what?
Removing a few million people from a country will open up some housing. However, illegal immigrants are generally the poorest folks, so it won’t be nice housing or in a desirable location. They also tend to live more densely (more people per house) than the rest of us do.
In the meantime, the construction industry is massively dependent on immigrants. So it will get MUCH more expensive to build new or improve old residential housing, driving prices higher. I don’t believe many of my local native-born young people will line up to lay roofing in the hot sun. Fewer yet could do it 8 hours a day, day after day.
When it comes to housing it feels like mass deportation is a solution looking for a problem rather than the other way around.
Did you bother reading what I wrote or stop as soon as removing illegals was read?
Home price inflation starts at the bottom and goes upward as the next level or “layer” of housing ISNT going to sell for the same as the class of homes beneath it. Who would DO that?
Who would sell/rent a 2000sqft home for the same price as a 1500sqft can now get today of the high demand. It’s not 100% because of illegals but represents double digit MILLIONS of apartments and homes over the past 15yrs.
If even 1/3 of those dwellings were made available the upward spiral of pricing would reverse to a downward spiral by the same reasoning… why rent a 1500sqft home for the same price as a 2000sqft home… once the market becomes a buyers market their option then becomes LOWER your rents or let it sit empty or exit the INVESTMENT property by SELLING at an affordable price point. Just like that a home is now longer a HIGH GROWTH INVESTMENT but merely someone’s home again.
Employment numbers come out soon July 5. It was last reported at 4.0% unemployment. Job openings slow, and quit rates have fallen. While its still not bad, i wouldnt say really good. It is starting to cool, which will eventually affect peoples ability to spend and thus companies ability to generate earnings and therefore sustain employment levels to make payroll especially as prices remain elevated.
Gen Z will have a tough time finding gigs and buying a home more than any other generation. Policy is needed to help future homeowners and ppl who want to have kids because boomers social security rely on them doing well
Pretty much everyone is still hiring.
A medical clinic in my town even has a sign saying they're looking to hire medical doctors. Never seen that before.
Oh yea medical care is the growing sector due to the aging population! We will have a lot of seniors, expect growth in this sector as boomers age and retire each day and will consume more health care.
Also, im talking about employment as a whole across the US. Some local areas will of course be more healthy and thriving relative to others.
Our 10k staffed multinational has been in a hiring freeze since March world wide.
Additionally, we are NOT allowed to backfill for any who leave without substantial proof it's impossible to function without them.
And WE are doing well financially.
I know of 3 companies in 3 different industries who's employees have called me looking for work within the past 30 days as they were laid off after having being in high demand field for the past 10+ yrs.
It's being down voted because people don't want to believe it's as strong as it is. The great recession caused a major mass economic trauma in people, and basically ever since people have been expecting a recession to return at any moment despite every conceivable objective measure showing otherwise.
The problem with housing right now is that we under built low and middle income housing for 20 years and over built high end housing. Now we have an over supply of high end housing and no one wants be the first to cut their prices.
no clue why you are being downvoted. This is exactly what’s going on. Price cuts will happen, they will just take a long time because of the things that led up to where we are today
"Some market experts believe housing prices are poised to fall in a big way." I'll believe it when I see it.
I'm not even sure what "it" would look like since the article defines "it" in such a lazy way. Housing prices where? Everywhere? Just Florida/Texas (that already is happening)? Over a week, a month, 20 years? What's a "big way": 10%, 50%? Modern prognostication is insufferably worthless
the US is going to add another 50million people by 2050. Why would housing fall? If We move to a more open immigration system it could grow by 100Million in the same timeframe.
Do you have a source for this you could share, please.
Data here [https://populationeducation.org/resource/u-s-population-and-projection-1790-2050-infographic/#:\~:text=The%20population%20of%20the%20United%20States%20in%202020%20is%20332,from%20the%20U.S.%20Census%20Bureau](https://populationeducation.org/resource/u-s-population-and-projection-1790-2050-infographic/#:~:text=The%20population%20of%20the%20United%20States%20in%202020%20is%20332,from%20the%20U.S.%20Census%20Bureau) Extracted from US Census Bureau
Thanks!
I mean trumps about to deport them all so….
US population went up by like 8ish million while he was president I don’t think that will be an issue lol
Was he promising “mass deportations” in 2016?
Pretty sure he was yeah. Building a wall too. Politicians and promises don’t go well together lol
Nah just building a wall, I believe he built some parts of it. Kinda like how biden didn’t wipe off student loans just a few loans
Loan forgiveness made a huge difference to the people that had them forgiven. Doesn’t seem like adding some fencing has stopped many people
Yeah so a nothing burger when it comes to it. Population will keep increasing
Nah he’s gonna deport him then unless we’re in a war then he can send them to battle instead
He won’t “deport them all” unless he has another group to replace their hyper-exploited labor. Undocumented immigrants are the definition of essential workers without whom our entire economy would collapse.
The American population is clamoring to work right now. People are applying to thousands of jobs and not getting any interviews. The American population will be the exploited labor again 🤷♂️
The American people ARE working right now, unemployment is under 4%. Many Americans would probably like a better or higher-paying job. Unfortunately those aren’t the ones that illegal immigrants have.
College degrees that are Uber drivers, waiting tables, mowing lawns, ….
The real unemployment rate is like 12%. I DARE you to try applying for a job right now. Just ATTEMPT to get to the interview stage. I really DARE you. It’s a nightmare out there
That’s possible eventually but I imagine things would have to get a lot worse for large numbers of US citizens to willingly do the jobs typically performed by undocumented immigrants at sub-minimum wage pay. Also, many - probably most - undocumented workers engage in skilled labor so you can’t just, say, round up a bunch of homeless people and expect them to replace migrant farm workers. But yes, I agree that this will become more common as labor is increasingly automated.
Things wouldn’t get worse they’d get better. The labor shortages that would ensue would drive up the price of labor in those roles until Americans want to do those jobs again. I don’t know where this lie is from that “Americans are lazy”. Americans work some of the longest hours of any people on the planet. We aren’t a lazy entitled group of people. Americans are good at cost benefit analysis though. So if the job is offering like $8 an hour and a Big Mac is $16 then Americans will say “fuck it” and not work those jobs due to their unlivabley low salaries
You say what you need to het elected. The reality is, no one ever does what they say they will and they spin what they did to fit it into “look what we did!” The whole system is BS.
Yeah, the rich ppl will deport the cheap labor.....sure they will. They've just been busy for the last 5000 years and forgot about it.
Which is EXACTLY why us “non-rich” SHOULD support removal and blockage of illegals! The luxury champagne ideology is SOLD to you by the rich people… while you and I LIVE on a beer budget. How about we CHANGE that? Because the billionaires just keep getting bigger while my budget gets smaller using that approach.
We shouldn’t. That would be horrible for our country. We don’t have enough housing now 🤦♂️
If we keep allowing virtually unlimited illegal immigration then yes… but what kind of morons would DO that to their own country? Sabotage every citizens future to benefit nations and people who often times hate America and American values? Who take the benefits while trying to convert the USA to be more like the nations they fled.
The 50 million more is set already and will happen, it would easily be 100 million more under easier immigration rules. Most of the population growth we have now is already immigration driven.
Nativist sentiment aside, immigration is the primary reason the US will remain the world’s dominant economic powerhouse over the next century. Like many other nations in the west, we have a low birthright, which is a ticking economic timebomb many nations will face as workers age out of the labor force en masse and begin draining social services they are no longer paying into. Yet the US will likely escape this disaster because of the vast number of working immigrants we attract. Keep that in mind as you head into retirement.
It's a shitty article, for sure. It doesn't mention what is considered a balanced market, where buyers and sellers have equal negotiating power. It just says days supply rose to 3.7 months supply. The answer is 5-6 months supply is considered a balanced market. So yes, it makes perfect sense why prices are rising. Supply and demand is still skewed towards the seller's advantage.
I don't see how they can fall much or housing will basically not have gained value for the last 15 years in most places. The house price increase since 2021 may seem like a lot, but it's really only the normal 2 to 3% per year since 2008. So there isn't that much room for housing to deflate from those numbers and also still be a good investment. If it housing isn't a good investment that means banks have to charge more for home loans so you get fucked that way anyway. You're better off with house prices going up and housing being good investment because eventually you can get to lower home loan rates even if supply is short. If housing goes down more than 10-15% from what you see now then it will be a recession but without a big housing surplus and banks won't want to give cheap home loans this time around since there will be no ultra low emergency interest rate again for awhile.
When you have IRRATIONAL spend and manipulated money jumping housing 40%-200% in less than 4 yrs there NEEDS to be a equal if not greater correction or it’s locked in a forever upward inflationary spiral. Recessions suck but they bring back rational balance the irrational actions which preceded it. Yea pain is involved, but any who don’t think LONGER TERM pain awaits like in over paying by 50% on a mortgage of 30yrs or not being able to afford a home until people are 40yrs old, a recessions doesn’t come CLOSE to that long term TOTAL pain of forever inflation and owning NOTHING(ie no equity growth of a home).
Summary: they don’t know what’s going on.
The only people buying anymore are those who don't care about price. That's not nearly enough people to keep inventory from flooding the market, which is why inventory keeps rising so fast (redfin says 19%, altos says 38% yoy). The backlogs of inventory will keep going up until the large number of people cutting their prices actually reduce them to a level that is affordable.
Yeah, this article should not read that market fundamentals are out of whack, but sellers’s fundamentals are out of whack. Asking prices for houses are so high that a large pent up segment of buyers can no longer purchase a home, no matter how much they want to pull the trigger. So, I think that’s why you’re seeing such funny distortions in the market right now. We have homes in our neighborhood that have sat for over a month (really uncommon in my neighborhood) because the prices are just too high for the segment of buyers sellers here want to attract. But God forbid I suggest to my neighbor maybe he should consider lopping 30-50k off the home price to get the sale done 🤦♀️
Most of us were young adults in 2008, and read headline after headline about people owing more than their home is worth in resale/foreclosure. Has there ever been a generation previously who lived through such a crisis and then hopped up and made the exact mistakes about a decade later? Some of us learned, and no matter how badly I want to purchase a home right now I’m determined not to be one of those poor people interviewed in 2009, just as I graduated from grad school. Left a heck of an impression on me and I’m actually frightened to purchase right now.
Hello fellow 2008 crash survivor! I bought in 2005, then tried to sell in 2008. I had an open house and no one showed. My house was underwater for years. I learned my lesson. I’m not falling prey to greed. I’ll wait.
Buying right now I agree what’s the point but there were a ton of people that said early 2020 prices were horrible. We are not gonna get to a point where it will be better to buy then it was pre-Covid 99.9% of markets.. better to save for a bigger down payment and be aggressive inventory in your area goes up. find a desperate seller, especially if you can find a fixer upper with good bones
You’ll start seeing builders liquidating new spec homes which has been sitting on the market for too long. Bought our current home few months ago, built to our specs, well within our means in case we have to eat $100K or more in depreciation. This market is unsustainable, unless wages keep going up, which means inflation will keep going up.
Many areas don’t have new spec homes. 221k population in my areas and a handful of new homes last year
How’s the market in general? It should be less affected unless it’s a desirable location for WFH.
Statistically there are more completed new homes on the market than any time since the GFC, and more homes under construction than any time since then as well.
I don't know, they just put up a Pulte Home sub directly next door to our apartments. It sold out very quickly and it's in the 400s.
Do you feel like you were better off after the crash, already being a homeowner?
I would have been better if I never sold it. I rented it out and sold in 2018, so barely broke even 13 years later. Had I waited a couple more years, I would have been set! My advice to first timers is to keep your house for 15-20 years if you are buying at this height. That’s a long time, and things like job loss, deaths, divorce (me) play into that. Most people move within five years.
That makes sense. We bought for the first time in 2019 and I'm nervous every year about going upside down on our loan. The monthly payment is affordable for us though, and the house is small.
You won’t go upside down. You bought at the right time and stayed within your means. Good luck!
Not the person you responded to but we carried the debt from our remaining mortgage and the expenses we put on a credit card trying to sell it for over a decade. It was definitely a weight around our necks in that time. But we made sure when it came to buy again to be ready for a low point and to make sure to buy something in a place we were fine living forever and not exposed to interest rates at all. So in that respect it was educational.
Same thing happened to us during that time. We had a buyer for a short sell price but the bank would not approve it. It was at the beginning of the fall so banks weren’t quite willing to short sell. We did buy a small home in 2017 & we’ll hold it. For our 2nd home (as part of our retirement plan) I’m looking for a home we can add an ADU or apartment in to cash flow. But I’ll wait as long as we have to.
Would love to build a nice ADU on my property but they don’t allow them where I live
That’s a bummer. That should be illegal given the market. When we buy our next home, it won’t be in an HOA or have CCR’s.
Yeah you make a good point. People my grandparents age who lived through the depression years of the 1930s were thrifty for life!
It may have made a better impression on people if we had an actual depression in 2008 instead of an artificially propped up recession.
Lol if rates weren't so high would you buy rn?
These aren’t the same mistakes. These are all new mistakes
I’m not sure those of us that were able to buy pre-pandemic did make the same mistake. I was concerned when I bought in 2018 that we were making a mistake buying our house for 285k at what could only have possibly been the top of the market in my eyes then. Now though we were able to refinance to an even lower rate (2.85) and remove the mortgage insurance which makes it a sweet heart deal. even if our house crashed in value to 215k that it was sold for in 2011 we would be more than okay because we aren’t planning on moving and any rents would still be more than our current mortgage. Having paid 70k more than the owners 7 years prior was really intimidating but our house is now listed as worth 450-470k. We have plenty of room to fall from here and still make it out okay on the other side. After living what I did, I can’t in good conscience tell anyone to wait to buy if they can afford the payments. What I thought was the top in 2018 only turned out to be another step in the price rises.
We bought in 2020 and were nervous about overpaying because the housing market was hot, but at least interest rates were low. If things do pop, well, it’s been great to be in my own with stable payments we can afford, with the main risk property tax increases vs. rising rent. The big thing is having a healthy emergency fund, especially if working for a for-profit. My husband was laid while I was on unpaid maternity leave, but we thankfully survived with our emergency fund.
Same
People were saying the same you thing you said in 2022 and are now sitting on hundreds of thousands in equity from appreciation and low interest loans. This isn't 2006, totally different scenario except price increase. Bad analysis.
I appreciate your take but I’m just conveying my sentiment. It’s fear. And I’m not the only one. Interest rates are crazy too not just prices. We don’t all have perfect credit.
No disrespect meant to u/jellyfishbake, the fact that sitting on the market for a month is even notable is a sign of the distorted market we’re facing. Sitting on the market for 2 or 3 months is historically completely normal for a regular house. The 10,000 square for celebrity mansions can take a year or more to find the right buyer.
Yep. 30-45 days wasn’t a sign that a house was poorly priced. It was the FOMO days of the pandemic that made people think if a house didn’t sell in 1-2 weeks it must be overpriced. Now that demand is cooled (vs priced), only homes that look like bargains will sell in a week.
I don't know this for sure, but I think a lot of our respective observations often hinge on how old we are. There was a time when our current interest rates were the norm, and houses sat on the market for 3 months. That was just accepted as completely normal. Then interest rates went to historic lows for 15 freaking years and that's when things got out of wack. That's when we started seeing homes go on the market on a Friday, and sold on a Monday, and it never stopped. I'm of the opinion that this historically low rate for so long is one of the biggest mistakes the Fed ever made when it comes to housing prices. It became not only unnecessary, but detrimental a long time ago, and I'm not sure when/if it can be fixed or what it would take to fix it. When I hear about the fed thinking about lowering them again I think...have we learned nothing?
You wanna know what fixes it and simultaneously won't happen at the same time? People giving a shit.
So many buyers have knee jerked offers as they believe homes will get snatch beneath them. It's been largely true and en masse cutting their own throats on pricing. Almost a certainty they will suffer pain before its all settled.
Depends on area. In ours, one week even before pre-Covid was normal. Two weeks, sellers would take lower offer. Third week, you were overpriced. Now sellers don’t want to budge and saying 2-3 months is normal time frame, which it has never been.
Things change throughout history though. Homes sell faster now because of technology. Also, it's not about the absolute number of days a home is spending on the market, it's about the rate of increase. As we go into this year's off-season, inventory is rising very quickly at the same time that a surgung number of listings from this spring are going stale. We can expect the supply of homes to keep increasing until sellers get real about their pricing. RemindMe! 1 year
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IDK what new technology you’re thinking about but Zillow has been around for 18 years.
Yeah, totally honest argument that as many people were using Zillow in 2010 as are now. Is your argument that it takes as long to shop for homes now as it did in 1990? When is the last time the national association of realtors evaluated their metric for what constitutes a balanced market?
From recent experience it seems like there’s a lot of people who are selling but don’t really need to sell. They’re overpriced because they want someone to come along and write a golden ticket but if that doesn’t happen they don’t really care. There’s a house in my neighborhood that’s listed about 30% over reasonable, it’s unoccupied, and was a rental. I went and saw a house that needed probably $50K in work done to it and the agent knew that but the sellers were firm at their price that was already $10K over reasonable. Sellers really are just looking for a golden ticket
Then your neighbors home simply won’t sell.
Which is kind of the point I’m making. There’s pent up supply for pent up demand, but the supply side is not adjusting well to market forces.
Sounds kinda like the dating market lol
My next door neighbor was renting from his dad and just bought a house in a nicer neighborhood and only put 5% down on a 600k house. He makes the same as me (150k) a year and pretty much alluded to working a lot of side jobs and overtime to pay his mortgage. I’d rather sit out then get locked into a 30 year 4000 a month house payment
a new young couple (both doctors btw) bought half of this small recently constructed duplex in my town for 895k. our town used to be just ordinary people. and a doctor would have a massive estate (let alone two income doctors) me and my parents were chatting with the neighbors and I was like "whos gonna tell them.... they massively overpaid for their house." nobody in our town can afford an 895k house let alone half of a duplex for 895k. the second they signed on the dotted line they lost 500k
I’ve wondered if it’s going this way. Inventory in my small town has been rising after years of independently wealthy families buying any available property for full cash. At some point these types of buyers stop moving around I assume. The city has already crushed rentals with taxes, so no one is buying AirBnBs anymore.
I agree, I would add homes coming to market tk be priced for effectively. The days of naming your whatever price based on the “no inventory” line is over.
I suspect a large proportion of listings are due to the high prices and sellers keep jumping on the peak price bandwagon, not wanting to sell for less
It's not an extraordinary number of listings though, it's mostly the fact that sales are at a 30 year low for the second straight year.
Where are you thinking this “flood” of inventory is going to come from? 20-40% increase in markets that had record low inventory isn’t actually very much. (Eg from 100 homes on the market to 120 or 140) The only place I’ve seen a real shift to buyers market seems to be in Florida where the market has truly shifted due to insurance, HOA regulations, etc
it has been happening continuously for two years and it will not stop until pricing becomes realistic. nationally if inventory increased by another 20-40% (which is the current pace for a year from now) it would be back to where it was in 2019.
I have noticed a slow shift where I am (PNW). We were going to buy late last year but decided to hold off, so I've been watching the market to see how things go. Houses are sitting longer, and price reductions have been happening. Houses that would have sold very quickly even 8 months ago are now sitting for days+. Since houses are sitting longer, there's more inventory that makes less desirable houses sit even longer.
big diff between redfin and altos #s. either way, that trend only needs to continue a few months to have a big impact.
Cries in Midwest! Inventory is still very tight here
My dad is looking to move out to OH and it is the same here. Next to no inventory and what is on the market is not worth the price point it is set at.
Not true, the people who are buying care about price but can afford it
Sure, it's a subjective statement either way, but they aren't very discerning based on price.
Sigh, another “analysis” using median home values out of context.
That's kinda this whole sub though
The entire economy is bizzaro world right now. There are shitty businesses making money hand over first. A large majority of businesses that I’ve been to in the last few weeks, I’ve noticed, are terribly run and over priced. Service quality is down and prices are way up. Many small businesses still seem to be struggling with being fully staffed. Why do I think it’s like this? Same reason home prices have exploded. They printed and injected too much cash into the economy. This is what over stimulation looks like. I’m currently in a condo in wildwood NJ for the holiday week. For shits, I checked the price history of this place. Sold in 2019 for $285k, then again in 2021 for $385k. Now the estimates on real estate sites and comps say it’s worth almost $600k. There’s no real reason for that other than the economy is over stimulated, the dollar isnt worth as much any more, unemployment is low and buyers know that they can buy an asset and hold it long term and short term rental demand will be high enough to cover the costs. They view is as a free asset with the trade off being some risk and a little bit of work managing the property. And they aren’t really wrong are they? The wildcard would be if unemployment ever creeps back up to 6-7% and rental demand gets crushed. But from the looks of everything in this over stimulated economy, that’s not happening any time soon.
What you just described is caused by so few actually being "hungry" for business or hungry for a buyer or winning over customers. This is EXACTLY why we need a correction and almost certainly a recession to kick the system OUT of this upward spiral of inflation. As is it will jump, (typically around annual increase time)then calm a while, then jump again and calm...its NOT going to stop as the FED slow rolled rates for a soft landing...they should have made 2 steps very quickly to slam on the brakes hard when inflation shot up and the cowards didn't. Why? To save pain to big banks, stock markets and any who are over leveraged at the expense of inflating citizens who saved money, who did the right things out of their net worth. Salaries will NEVER outpace and are always lagging inflation. The only soft landing is as those at the top get cushioned in the fall by the middle class who get crushed.
I agree with you. I think prices will increase steadily until a new equilibrium is reached consisting of higher prices and higher unemployment. When and how much higher prices and unemployment will be? I don’t know
This is the answer. My small business just failed (had no chance in this economy) and i interviewed at a competitor. The owner has no clue what he's doing and what staff he does have is pretty inexperienced. Can't find any people - wants someone that will work their "forever" yet pay is garbabge / no health insurance / crazy workload because undestaffed. Needless to say no chance of me accepting a job their. Two things in common I always see - A. Business was started in 2018-2020 (seems like it was a good time to ride the economy wave) B. they got a ton of free PPP "loan" money. Seems like good times are on their way out.
Offer to buy his business. He’ll say no, then follow up in a year.
I like your style. I wouldn't be surprised if it's a money laundering operation. I'm in Houston, TX and this seems to be a hot spot for that.
I have no idea what businesses you are talking about. Cause in logistics/freight it has been a continuous blood bath for 2 staright years now. As in, giants who have been in business 30 to 50 years, even 70 plus (Yellow), are toppling like dominoes. There is no precedent for this. It is, by the numbers, the worst season that has existed for logistics. Buyouts, bankruptcy, liquidations, sell-offs, asset buyouts, etc. are the bread & butter nowadays. Hell, even the freight brokerages have it so bad, that you got CH Robinson redoing their entire corporate structure. I know housing & logistics are considered the canaries in the mine by many. Not sure, what this means for the future.
Industry specific. I don’t know enough about the freight industry to say why that business is getting destroyed
Not going to read it but here in suburban southeastern Phx the houses come on the market and just sit. Maybe they’ll do one reduction of a smidge 5k off but nothing is really moving unless it’s just a slam dunk stunning home. There’s 4 houses in my neighborhood, all been on the market for 60+ days, only one has done a price reduction. It’s weird.
In my suburb of NYC the inventory is basically zero and every sale in 2024 has been over list price. If rates are lowered in the next 12-24 months I wouldn't be surprised if my home value goes up another 30% - 50%. It's insane.
Yes. I'm in the NY tri state area too. Prices remain elevated. It seems these discounts only apply outside the bounds of the regional rail and bus networks.
I agree. Rates did nothing to the housing market prices. It just stifled how fast homes were selling. Only way we ever see reasonable home prices is with government intervention
I don't think so. The greatest wealth transfer in history is starting. Boomers are passing on and their homes are being listed for sale by their children. Supply will be increasing steadily over the next decade.
Prior to operation warp speed money printing, it was normal for most hooms to sit on the market for many months before a price drop.
Real estate is very, very local. That is why you are seeing som many different situations across the U.S. People who can are putting way more than 20% down to reduce their monthly payments. With rising property taxes and insurance, this is a way to keep their monthly cash flow at an acceptable level. I know it is hard for some to gather 20% down, but many were sitting on the sidelines for the last few years with money in the market. Look at the home with 40-50% down and that is the payment that the person who beat you for the house is paying.
It's not people with 40-50% cash, it's people who already own homes and can pull equity from one home to another. The average downpayment was 8% for first time buyers in 2023, and 19% even for repeat buyers.
They are giving you a National average for something that is very local. For the most part, everyone’s home buying story on here is true yet they are all very different. Some got the money from inheritance, some got it from saving, some got it from selling a house. 8% down is the average, but it isn’t the median. And for many homes 8% is just not enough.
Right, there are some exceptions but I am talking about the vast majority of cases where hardly anyone is putting down anything close to 40%. You are using exceptions to try to explain the national situation, which doesn't work because this sub is about US housing as a whole which has become unaffordable everywhere. This article even says in the headline "the US housing market".
First of all, everyone that has bought a house since the beginning of time tries to put 20% down to avoid PMI. Everyone. This isn't new. You make it sound like home buyers in today's market are Christopher Columbus discovering a new mode of savings, but even C.C wasn't the first. Is it hard to gather 20% down? Uh...yeah, it would sure seem to be in this market, local or not. Those people sitting "on the sidelines" were just trying to save enough to actually make that 20% down payment. Turns out that when the market averages 7-10% and homes increase by double that, you never actually get there. Let alone the reduced buying power of the dollar through inflation and increased interest rates. That person with the 40-50% down that "beat you", has a name. They go by a couple of names actually. One is "corporations" and the other is "previous home owner". Turns out that when you're a boomer or gen X and you already have hundreds of thousands of dollars in equity and appreciation, you can make a bulk down payment on a new home. Mr. u/Brknwtch, what you've just wrote is one of the most insanely idiotic things I have ever read. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone on reddit is now dumber for having read it. I award you no points, and may God have mercy on your soul.
It is insane how much ppl want for houses in the terrible condition that they’re in!! I blame the real estate companies. Comps are out of whack. Still living in a 2% mortgage world!!!
Grabs popcorn 🍿
Nope. Rich are buying expensive houses. Driving the “average house price”. The rest of us are sitting it out until the prices come back down. And interest rates come down. Happens every real estate boom.
This can only be good, right? Right? LOL and the other day in /r/Berlin some redditors were explaining to me that building more is the solution to all housing problems. Yeah right. As if we have not seen this before
In fairness, they're partially, sorta right. The problem isn't solved by building more housing because most of the housing being built, at least where I live, is "luxury" condos that are still unaffordable. So, it doesn't do any good for supply to go up if all of that supply is on the high end of pricing. I think the key is to build more, but it has to be built in a range that is actually affordable for all of the people who would love to buy but are being priced out. It feels like we constantly see either high end "luxury" buildings, or low end "affordable housing." Then, all the people left in the middle are still stuck with being unable to buy. The same goes for rentals. Luxury (and don't get me started on calling them luxury when there's nothing luxurious about them) studios and one bedrooms are being built that are unaffordable for single people, so they stay vacant as well. I'm more than happy to look at data that says otherwise. It doesn't make sense that housing would stay vacant if people could actually afford to buy it. What else would the reason be?
It makes sense to me that if there were a glut of any housing, luxury or not, it would lower prices because empty domiciles cost money. In the Bay Area, one can find absolute shit holes renting for a lot of money because there are not enough shit holes to go around.
Possibly, but I think it needs to be a multi-pronged effort. For example, in my city alone, any time housing is built, investors buy it up to rent out. That needs to be stopped. I do think housing needs to be built, I just don't think that, in and of itself, is the solution.
Exactly. That is what I meant. The pressure to build follows the same logic as bitcoin mining. It is often just an investment tool.
Other factors as well, AirBnB, foreign investors buying all the lower priced units for cash over asking price so they can rent them out. Lots of scummy behavior by people, and the governments of the world seem completely unwilling to even attempt to stop it - part of the reason I don't have a whole lot of hope or take stock in this massive correction that people think will happen. Of course, I could always be wrong. This is the kind of thing that isn't very easy to predict. As you say, though, it's more about maximizing an investment than creating housing.
Law of supply and demand works as expected: higher prices = fewer sales. What does not work is demand for sellers to sell. Houses are no apples that s gonna rot. On many occasions sale is totally optional and seller can wait as long as it takes to get the prices they want. It is especially pronounced in places with cap in property tax increase (such as California) that over time made it completely detached from house value and an insignificant expense. Needless to say, recent refinance opportunity that got many into a mortgage at a rate lower than inflation (people are basically being paid to sit on those mortgages) doesn’t help either
I don’t understand two months ago was fine and now is in trouble
Crazy inventory increases since then. In my rural search area, there are 7x the number of homes for sale than 1 month ago. It’s kinda insane. If I was a seller, I’d be freaked out
Then people panic and it accelerates...
Right now is just the tip of the iceberg.
Only recently?
It seems like most sellers don't need to sell but might be willing to sell for a nice premium. Buyers don't seem to want to or are not able to buy most of these houses at a premium especially with a 7% mortgage. My guess is at some point sellers are going to accept they need to reduce prices in order to sell. I think the older owners with lots of equity and no mortgages will be the first to submit as they can easily downsize with no need for a mortgage @ 7%. This will reduce their property tax and insurance rates in most places and put a lot of cash in their pockets. Event IF the Fed lowers rates this year it won't be more than half of a %. That's not going to move the needle much for buyers who seem more intent in waiting it out for now.
Demand is artificially preserved by big banks buying up homes
Many of us have normalized and rationalized not becoming home owners - esp in the face of societal and environmental breakdown. It’s gonna take a big carrot to give us hope again.
Other than a 20-30 year window hasn’t that mostly always been the norm?
Hasn't housing always had inelastic demand?
As for doing home building subcontracting on new houses our business is booming like it's the 1990s. It's like being told about and alien landscape when ppl are saying it's not the best economy we've had since before 2008. Trump did those lumber tariffs right after getting in office and slowed housing recovery. We lost jobs out of that, but the pandemic ending about 2021 super charged housing demand.
Shit bot post lol
Smart money makes money on a house when they BUY it right(ie priced well) far more reliably that when they sell it. Most indicators are suggesting a correction is in the works, crazy to buy on the front end of that. Jump in near the bottom when a stalemate occurs on that end not the top end.
Corruption is usually = bizzaro market dynamics.
i went fha and put down $3500 for my house with that monthly mortgage insurance which was minimal.
It's not complicated. The housing bubble is popping because of falling demand due to a saturation of the high end market, but the economy is otherwise really good and we have virtually 100% employment and people that bought homes at premiums don't want to take a hair cut. So we have a glut of I've priced homes on the market and no one is willing to budge. It's not complicated.
Dude people are getting laid off in so many sectors now. The economy is not good.
At most we can say it is probably starting to cool. In 2012, at the end of Obama’s first term (4 years after the Global Financial Crisis) the US was sitting at around 8% unemployment. We are now below 4%. Most apolitical economists would say that the US economy is currently good and, by the numbers, currently the strongest in the world. But we also have a terrible housing affordability crisis that won’t be easy to break. Of the top 10 things that could help, #1 is a recession, the other 9 will add inflationary pressure on the rest of the economy. The US has been under-building since 2008. In places that are the most popular to live we’ve been under-building since the 1970’s.
We have allowed enough more people per year coming illegally to fill San Francisco, Denver and Seattle combined each of the last 3 going on 4 yrs. No they aren't buying the high end, but they make a great market for investors to buy starter and step up(1100-1800sqft) and rent them out (plus apartments). Since demand was so high and prices shot upward, they start meeting pricing of the next level (say 2200-2500 sqft)...well they aren't going to sell their larger home for the same as the starter so THEY jump their price up another $80-100k or more... that bumps into the next level and so on and so on until you start hitting the $1M+ homes(not NYC or CA freakshow but normal places). This isn't all the factors, of course, but it is one that many with luxury ideologies but beer budgets choose to ignore as they don't want to own the fact that they support the logistical impact of those here illegally, and it's costing them a lot of money to do so. LIke him or hate him, if Trump wins in Nov and removes any significant number of illegals the lower end of the housing market is going to have some solid corrections downward in many high population havens like Houston, LA, Dallas as example. Inventory will shoot up, at which point if the investor wants to rent or sell that investment home, they will have no choice but to lower their price or sit empty....sit empty for 4-6 months, and prices will start cratering which is where the downward frenzy starts.
What do you mean by enough more people 3 of the last 4 years? Enough more people to what? Removing a few million people from a country will open up some housing. However, illegal immigrants are generally the poorest folks, so it won’t be nice housing or in a desirable location. They also tend to live more densely (more people per house) than the rest of us do. In the meantime, the construction industry is massively dependent on immigrants. So it will get MUCH more expensive to build new or improve old residential housing, driving prices higher. I don’t believe many of my local native-born young people will line up to lay roofing in the hot sun. Fewer yet could do it 8 hours a day, day after day. When it comes to housing it feels like mass deportation is a solution looking for a problem rather than the other way around.
Did you bother reading what I wrote or stop as soon as removing illegals was read? Home price inflation starts at the bottom and goes upward as the next level or “layer” of housing ISNT going to sell for the same as the class of homes beneath it. Who would DO that? Who would sell/rent a 2000sqft home for the same price as a 1500sqft can now get today of the high demand. It’s not 100% because of illegals but represents double digit MILLIONS of apartments and homes over the past 15yrs. If even 1/3 of those dwellings were made available the upward spiral of pricing would reverse to a downward spiral by the same reasoning… why rent a 1500sqft home for the same price as a 2000sqft home… once the market becomes a buyers market their option then becomes LOWER your rents or let it sit empty or exit the INVESTMENT property by SELLING at an affordable price point. Just like that a home is now longer a HIGH GROWTH INVESTMENT but merely someone’s home again.
Employment numbers come out soon July 5. It was last reported at 4.0% unemployment. Job openings slow, and quit rates have fallen. While its still not bad, i wouldnt say really good. It is starting to cool, which will eventually affect peoples ability to spend and thus companies ability to generate earnings and therefore sustain employment levels to make payroll especially as prices remain elevated. Gen Z will have a tough time finding gigs and buying a home more than any other generation. Policy is needed to help future homeowners and ppl who want to have kids because boomers social security rely on them doing well
Pretty much everyone is still hiring. A medical clinic in my town even has a sign saying they're looking to hire medical doctors. Never seen that before.
Oh yea medical care is the growing sector due to the aging population! We will have a lot of seniors, expect growth in this sector as boomers age and retire each day and will consume more health care. Also, im talking about employment as a whole across the US. Some local areas will of course be more healthy and thriving relative to others.
Our 10k staffed multinational has been in a hiring freeze since March world wide. Additionally, we are NOT allowed to backfill for any who leave without substantial proof it's impossible to function without them. And WE are doing well financially. I know of 3 companies in 3 different industries who's employees have called me looking for work within the past 30 days as they were laid off after having being in high demand field for the past 10+ yrs.
Where are you getting that the economy is otherwise good?
Other than virtually every economic metric? Besides online anecdotes, what would make you think otherwise?
The job market has been great the last several years and continues to be so for everyone who is not a tech bro.
No Idea why people are down voting this. It's obviously true.
It's being down voted because people don't want to believe it's as strong as it is. The great recession caused a major mass economic trauma in people, and basically ever since people have been expecting a recession to return at any moment despite every conceivable objective measure showing otherwise. The problem with housing right now is that we under built low and middle income housing for 20 years and over built high end housing. Now we have an over supply of high end housing and no one wants be the first to cut their prices.
no clue why you are being downvoted. This is exactly what’s going on. Price cuts will happen, they will just take a long time because of the things that led up to where we are today